Jakarta. Indonesia is set to be among the future economic superpowers --alongside India and China-- that will drive the global economic growth, according to President Joko “Jokowi” Widodo.

Indonesia's outgoing leader said Tuesday that the world had now entered what he called the “Asian Century”. The global economy has begun to shift from being West-driven to Asia. Jokowi claimed that Indonesia --the largest Southeast Asian country by population size-- had the potential to be a major economic driver.

“Growth has shifted to Asia. In Asia, there will be three new economic superpowers, namely India, China, and Indonesia,” Jokowi told the 2024 BNI Investor Daily Summit at the Jakarta Convention Center (JCC).

Indonesia’s economy grew 5.08 percent in the first semester of 2024 -- still within the government’s target of a 5-percent growth. But Jokowi admitted that the path to achieve that “economic superpower” status is a thorny one amidst heightened geopolitical tensions and climate change, among others.

“Economies around the world are growing at a slower pace of between 2.7 and 2.8 percent on average compared to us whose growth exceeds 5 percent. Not to mention the escalating geopolitical tensions including wars in Ukraine and Israel against Palestine, Lebanon, and now Iran. All these have worsened economic uncertainties. But we still need to be optimistic,” Jokowi said. 

The incoming government --set to be led by former army general Prabowo Subianto-- also has a lot to work on, according to Jokowi. 

This includes improving Indonesia's incremental capital-output ratio (ICOR) which gives a portrait of the relations between the investments made in the economy and the consequent increase in gross domestic product (GDP). The lower the ICOR, the better as it means that the economy is efficient and the investments should be able to drive a more robust growth.

The Central Statistics Agency (BPS) data showed that the country’s ICOR stood at 6.33 as of last year, surpassing the ideal level of 4.

“We really need to boost our productivity. Everything related to productivity, including the ICOR, will be a huge task for the incoming government to handle,” Jokowi said. 

Despite the challenges, Indonesia has what it takes to be an economic superpower, including a growth beyond 5 percent and an inflation rate that the government has kept a check on. Indonesia’s consumer confidence index also exceeds the 100-level, meaning that people are still upbeat about the economy.

Jokowi's economic policies put emphasis on the localization of Indonesia’s mining sector. By banning exports of unprocessed nickel ore, Jokowi intends to encourage the domestic processing of the said silvery-white metal and have them processed into higher-value finished goods. Jokowi is also urging the government to not hold back on extending this resource nationalism to other commodities, including seaweed.

“Indonesia needs to keep its 5-percent growth or even expand by 8 percent as what Prabowo has targeted,” Jokowi said.

He added: “If we focus and stick to our tactical strategies, the ‘Asian Century’ and Indonesia being an economic superpower will really happen.”